Colonial Mutual Compensation Insurance v. Mitchell

STEPHENS, P. J. Petitioner duly organized under the Workmen’s Compensation Insurance Act as a limited mutual company. It applied to the respondent for a certificate of authority tendering for approval securities and cash in an amount of $25,000. May 22, 1934, respondent submitted the application to the attorney-general and thereafter the last-named official advised the insurance commissioner that a company commencing business must deposit a minimum of cash or securities in the amount of $100,000. Whereupon respondent refused petitioner the certificate of authority [653]upon, the sole ground that, as directed hy the attorney-general, he would require $100,000 in cash, or securities, it being conceded that otherwise .the certificate should issue and that the value of the securities offered amounted to $25,000. A demurrer to the petition was interposed.

It appears that since 1917 the Insurance Commissioner, acting upon advice of the attorney-general, has continuously permitted companies to commence the business sought to be done by petitioner upon deposit of $25,000; that when petitioner made its application there "were eleven workmen’s compensation insurance carriers operating in this state, each one of which began with a deposit of $25,000, which amount remains unchanged as to seven, and as to none, has the amount been raised to more than $33,000; that in issuing permits upon this basis the Insurance Commissioner has at all times acted upon the advice of the attorney-general as to the sufficiency of these initial deposits. The law has not undergone any change in the sections of the act here in question within the period since 1917.

The issue here presented requires that we construe sections 1 and 11 of the "Workmen’s Compensation Insurance Act enacted in 1917.

The title of the act and section 1 read as follows: “An act to provide for the protection of beneficiaries of workmen’s compensation insurance policies against the default or insolvency of insurance carriers issuing such policies by requiring such carriers to provide security for the payment of such compensation. (Approved May 9, 1917; Stats. 1917, p. 292.)

“Section 1. Every insurance carrier, except the state compensation insurance fund, transacting the business of workmen’s compensation insurance in this state, shall on the first day of October, A. D. 1917, file in the office of the insurance commissioner of this state a bond in favor of said insurance commissioner as trustee for the beneficiaries of awards of compensation rendered by the industrial accident commission, executed by said carrier and some surety company or companies approved by said insurance commissioner and authorized to transact the business of suretyship in this state. Said bond shall be in an amount not less than the reserve for outstanding losses of said insurance carrier on compensation insurance in this state on December 31, A. D.